Grantor-retained Annuity Trust

Grantor-retained Annuity Trust

About Grantor-retained Annuity Trust:

Grantor-retained Annuity Trust (GRAT) is a trust in which the grantor retains a qualified annuity interest. A GRAT provides for a guaranteed fixed income payment based on the value of the assets at the time they are initially transferred to an irrevocable trust. The amount of the gift is the fair market value of the property transferred to the trust, less the value of the qualified annuity interest. The grantor enjoys the use of the transferred assets and has a reduced estate value at death.

See also other Tax Terms and Definitions in U.S.A.

charitable remainder annuity trust.

See Inheritance Tax and Inheritance Tax.

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